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Cheaper iPhone to draw crowds around globe

Apple will launch its new cell phone, the iPhone 3G, in twenty-two countries on Friday. Cheaper than the first one, the new iPhone won't be available in France until July 17th. Apple hopes to sell more than ten million units by the end of 2008.

The new iPhone is expected to attract hordes of buyers when it goes on sale on Friday in more than 20 countries, helping Apple Inc handily beat its target to sell 10 million of them by the end of 2008.

The much-anticipated smartphone has faster Web links than the first iPhone, supports third-party software like games, and is being heavily subsidized by many phone carriers, with some even giving it away to attract new subscribers.

Atlantic Equities analyst James Cordwell said Apple may sell more than a million new iPhones in the first weekend, partly because it is selling in so many more countries than the first one, which was only available in six.

Some 270,000 people bought the first iPhone in the few days after its launch in late June 2007, after many U.S. customers had lined up for days outside its stores. AT&T, the sole U.S. carrier, will shoulder much of the cost for the latest phone to halve the price.

"They're going to bring users in droves to this product," Deutsche Bank analyst Chris Whitmore said. He sees Apple burying its own 10 million sales target by selling about 10.5 million of the new high-speed iPhones this year, having already sold more than 6 million of the first one to date.

Whitmore said price and distribution were two key reasons why the new device, which plays music and supports corporate e-mails, would outsell its predecessor.

New markets

While some analysts expect the new phone to sell best in the United States and Western Europe, consumer excitement in new markets such as Hong Kong, Japan and New Zealand appeared to foretell strong demand in other markets too.

"The key is less likely to be demand and more likely to be supply," said Atlantic Equities' Cordwell.

In Hong Kong, Hutchison Telecommunications was flooded with 60,000 online applications over the weekend from consumers hoping to buy the 500 phones on sale there.

In New Zealand, which will be the first country to sell the phone due to its time zone, people started lining up outside a Vodafone store on Tuesday, according to a local paper.

02, the UK arm of Telefonica, said its website was overwhelmed with early orders on Monday after being hit with 13,000 orders per second during the peak, according to a spokesman who said it had sold out in a few hours.

The carrier, which is giving the phone away to customers who commit to specific data service packages, said it has stock left to sell in stores Friday and expects more deliveries.

Carphone Warehouse Plc, a UK phone retailer, said interest for the latest iPhone is 10 times higher than for the first device. Neither company gave specific sales figures.

T-Mobile, owned by Deutsche Telekom, said it has received orders for several thousand iPhones in Germany alone, where the cheapest iPhone will sell for 1 euro. It also plans to offer it in the Netherlands and Austria starting on Friday.